SHILLONG, July 24: At a time when prices of commodities are skyrocketing in the market, a 5% Goods and Services Tax (GST) levied on several food items that are sold in labelled and pre-packaged form has made matters worse for the middle-class people.
The Union Finance Ministry had hiked GST rates on several items at the 47th Council Meet chaired by Union Finance Minister Nirmala Sitharaman last month in Chandigarh.
The new GST had come into effect from July 18.
Consequently, customers are now shelling out more money on household items, hotels and bank services among many other commodities/services.
Hotel rooms with a tariff of up to Rs 1,000 a day, maps and charts, including atlases, will now attract a 12% GST.
In this regard, president of the Federation of Shillong Hotels Parambir Singh pointed out that 12% GST will come as big burden on small hotels which sold rooms for Rs 500-999 as they would now have to charge Rs 80 as GST, while adding that the amount means a lot for small-time hotels as well as the guests.
Moreover, single packages of food items like cereal, pulses and flour weighing up to 25 kg will be considered as ‘prepackaged and labelled’ and liable to 5% GST.
Speaking about the GST on food items, a prominent city dealer on the condition anonymity said prices of rice will increase by Rs 2 per kg, while the prices of pulses will increase by Rs 4-5 with the imposition of 5% GST.
The dealer also said that there will be some load on the common people as majority of them live as nuclear families and hence buy goods in small quantities.
The Fianance Ministry has even hiked GST on cut and polished diamonds from 0.25% to 1.5%.
Reacting to this, a city-based trader said that people buying the ‘precious stone’ will still continue to buy it.
“People with less money will, however, settle for something else, and the people not wanting to buy diamonds, will not do so. Eventually, the hike in GST in other goods is of much concern as we do not expect GST to be charged for our basic necessities,” she said.
Government has also imposed 5% GST on hospital rooms, except ICU, with rent above Rs 5,000.
However, reacting to this hike in GST, the owner of Woodland Hospital, Dr W Kharshiing, said that rooms above Rs 5,000 per day in hospitals are mostly booked by people who are well-off, adding that these rooms come equipped with a kitchen and refrigerator etc.
Kharshiing, however, said that he does not have rooms that cost Rs 5,000 at his hospital.
It may also be mentioned that 18% GST will be levied on tetra packs and fees charged by banks for the issue of cheques (loose or in book form).
It is also pertinent to note that Central Board of Indirect Taxes and Customs (CBIC) had however clarified that items above 25 kg which are pre-packaged in a single packet will be exempted from GST.
